There were 9 legislators present at the hearing and 3 absent.
Ms. White, the Budget Director of The Office of the Budget, summarized the evolution of the 2025 budget. She reported to the Budget, Finance and Personnel Committee that the beginning of the budget process starts in July when the departments send in their requests for supplies and other needs. The Budget Office takes these numbers and compares them to the available revenue. The difference between the 2 numbers is the “Budget Gap”, and of course, the needs are always greater than the revenue needed to pay for the needs. This year the “Budget Gap” was $47 million to start.
That’s when the real work begins. The Budget Office staff of 3 begins to winnow down the many requests for things departments say they need. They do a line-by-line review, then reduce the costs based on last year’s actual numbers for these requests. They also cut out things in order to control spending. This year 22 positions were eliminated from the departments’ requests, although the DA’s office funded some
positions with grants. There are some programs that really cannot be cut easily. Health costs have skyrocketed. Union contracts are coming up to be renewed. Other costs are daycare $4 million, food insecurity $100,000, and $3 million for special education. 60% of those costs are covered by the state. Public transportation costs $243,000 but is a pass through from the state. The county spends $478,000 on summer youth employment, and $319,000 on probation. The public defenders’ office gets $319,000 as well. The committee hired a consultant to study correctional overtime in the hope of cutting back the costs.
The property tax is cut 4%, however the levy rate is up 1.59% in the first 2 quarters and the true value assessment is up 5.5%.(Ms. White pointed out that property tax costs are based on each individual property. In a question at the end of the presentation, she repeated that despite a 4% cut in the property tax, that rate depends on whatever enhancements each individual property has—acreage, additions like sunrooms or pools, additional rooms, etc. Tax rates for individuals can vary significantly with each property. In reality the property tax is 10% of a property’s value, (which Ms. White said was not really very much.) At this point in the budget process it was still underwater at $1.9 million. The county spends $3.6million In debt service. Third quarter property tax receipts were only up 1.45%. The third-quarter sales tax was also only up 1.45%. The Budget Office decided to expect a 1.45% rise next year, which then leaves a $4 million deficit after all the cuts. The hotel tax rate is 5%, up from 4% and has provided a 4-5% boost in funds this year. Next year the Budget Office predicts 2% growth. Revenue is expected to grow between 1.5% and 2% in 2025.
In calculating revenue the Budget Office leaves out grants and other funded mandates since they can be somewhat erratic, and the money is often already spoken for. Federally provided income is $8.6 million in 2025. That is down $2.6 million from 2024. Also the American Rescue Plan funds will end this year. The state will provide $10.6 million in aid. Interest will bring in $2.2 million. The office believes that interest rates will fall, and the legislature should keep that in mind. There will not be as much money in the legislative bank account to draw on, and the legislators will have to find new sources of income to fill the gap in 2025.
In 2023 the county had a fund balance of $85.3 million, and in 2025 there will also be $20 million that is unassigned. Debt Reserve is $4.5 million. The Debt Reserve is money that is not spent when a project comes in underbudget. It normally goes into a reserve account. There are also Community Benefit Funds that can provide income but are often earmarked for specific purposes like education on certain topics. Dutchess County received $247,000. from an opioid producer settlement, as well as $285,000 from a settlement with JUUL, the vaping company. Both of those are dedicated to special uses. Ms. White warned the committee that she had cut the departments’ requests deeply and they may come back to request more during 2025. She wants that. It is better to now spend money until it becomes really essential to spend it.
The final vote of the Budget, Finance and Personnel committee on the budget will be held Monday, Nov. 18th at 5:30. The public hearing on the budget with legislative amendments will be held Monday, Dec.5 at 6:30. The Budget override and adoption of the tax levy will be held Dec.18, at 6:30. These are both Board Meetings. You can watch these hearings in real time or later since they are archived online.
Respectfully submitted,
Cecily Frazier, 11.12.24